The Pound made gains against the Euro and Dollar yesterday largely due to comments on inflation when a Bank of England policymaker spurred speculation that the central bank may end quantitative easing next week. Traders brushed off a weak reading of UK retail sales, while UK corporate demand was seen to be aiding the Pound.
The Dollar declined against the Pound while making gains against the Euro yesterday as investors shied away from riskier assets on concerns about China tightening lending and U.S. monetary and political wrangling. Also to note the central bank left interest rates on hold and indicated that it will continue to do so for an “extended period”. However, it did present a brighter outlook for the economy than in its December statement. The FOMC also announced the winding down of some of its support to financial and credit markets.
Investors will remain wary this week ahead of key events, including news on whether U.S. Federal Reserve Chairman Ben Bernanke would win a U.S. Senate vote for a second term.
The Euro declined against Dollar and the Pound due to concerns about the fiscal health of Greece and other peripheral euro zone countries.
While German consumer inflation data came in weaker than expected pointing to benign price pressures in the euro zone this month.
Data released 28th January
EU 10.00 EC Business Climate (January)
EU 10.00 EC Economic Sentiment (January)
Industrial / Services / Consumer
US 13.30 Durable Goods Orders (December)
US 13.30 Initial Jobless Claims (w/e 23rd January)